An application to subdivide Lambton Swim Centre and Lambton Park into separate lots will be considered by Newcastle councillors on Tuesday.
City of Newcastle has applied to subdivide land at 50 Howe Street from one into two lots. The site is Crown Land but is managed by council.
Concerns about the proposal were raised by residents who questioned council's intentions and feared it could lead to the privatisation of Lambton pool. Three objections were lodged to council about the plan.
Council said there was no proposal associated with the application to privatise or sell the pool site, adding that the Local Government Act did not allow for either proposed lot to be sold as they are classified as Community Land.
"There will be no works to any existing buildings or recreation facilities on site or tree removal as a result of the proposal, nor rezoning for either lot," the council report said.
It said the subdivision "will allow for improved planning of the sites, without affecting the continuation of the operation of the Lambton Swim Centre".
"The subdivision makes clearer the intent of the two lots and will thus improve applications for grant funding to the state and federal governments."
The matter has been referred to the elected council as the lot size does not meet the minimum standard.
The proposed lot sizes would be 26,600 square metres and 5,903 square metres, which do not comply with the minimum development standard of 400,000 square metres applicable to the public recreation zoning.
However development officer Fiona Stewart, who assessed the application, said the proposed development lot areas "are of sufficient size to meet user requirements as demonstrated by the current operation of the Lambton Swimming Centre".
"Furthermore, the proposal is consistent with the objectives of the public recreation zoning and does not hinder the use of either of the created lots for ongoing recreational purposes," she said.
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